IN 2005 ITALY’S UniCredit bought HVB, Germany’s second-largest lender, in what at the time was the continent’s biggest cross-border bank merger. At a stroke this gave UniCredit a commanding presence in Germany, Austria and Poland. It was widely hailed as a foretaste of deals to come thanks to Europe’s single currency. “We will become the first truly European bank,” declared Alessandro Profumo, Unicredit’s chief at the time. So it was something of a shock when in 2011 Germany’s bank regulator, BaFin, sought to limit the amount of cash UniCredit could transfer to its Italian parent, fearing that the German unit’s financial health might be compromised. This seemed to violate the spirit of free capital movement within Europe, and officials in Brussels complained.
Finance, the sector that globalised the most …